Thoughts and observations on the radio/TV station and wireless tower trading markets. A look at the impact and integration of new media into station operations.
Station values, stations for sale, radio and TV station news, towers, and more from a Director of Media Services Group and co-publisher of Inside Towers.

Monday, June 29, 2009

Here is a great "cause" for broadcasters (and a chance to pick up equipment at bargain prices).

PACIFIC GROVE, CA -- June 23, 2009: The Bayliss Foundation is looking at a new avenue to raise funds for its scholarship and internship programs, hosting its first online auction. The event will last several weeks, with hundreds of items of new and used radio and broadcast equipment on offer, including transmitters, remote and production equipment, and video and broadcast applications.

"Our top priority is to recruit and retain today's graduates and develop them into tomorrow's industry leaders," said foundation President Carl Butrum. "We believe this online auction and future ones will provide a new revenue stream for the Bayliss Foundation so we may continue its mission of guiding the next generation of broadcasters. Winning bids will provide critical funding for our students."

Applications for this year's Bayliss Radio Scholarships are now being reviewed, and the foundation's board will announce the 2009-2010 recipients next month. Since it was founded in 1985, Bayliss has awarded more than a million dollars in scholarship money to more than 330 college students nationwide and placed more than 90 students in paid internships with broadcasters.

I attended a presentation made by Gordon Borrell of Borrell Associates (http://www.borrellassociates.com/) at the Virginia Association of Broadcasters convention this weekend. The foundation for Borrell's research is "following the money;" they determine how much local advertisers actually spend in local interactive media.

According to Borrell, the local interactive market is $12.7 billion and showing explosive growth. The market is shared as follows:

Pureplay - 47.6%

Newspapers - 26.4%

TV - 8.6%

Radio - 2.2%

Display ads are not fairing particularly well, peaking last year at $6.5 billion. The growth categories include email, search (directories), and video.

Borrell stated his premise that the Internet is "more a commerce medium than a news medium." He also is of the opinion that "Yellow Pages and direct mail are in free-fall."

Legacy media companies are growing at 19.2%, while the pureplays are growing at only 1.9%. Examples of 2008 online revenue growth rates for local media companies include:

Nexstar Broadcasting - 100.0%

LIN TV - 61.0%

Gray Television - 24.8%

Belo Corp. (TV) - 23.0%

Gannett (TV) - 13.0%

Media General Interactive - 7.7%

Radio broadcasters generated 2.4% of their 2008 gross revenue from local interactive (though Emmis Broadcasting did 5.1%, clearly ahead of the curve). TV broadcasters did 3.4% of their revenue from interactive.

In markets 1 - 20, TV did an average of $1,365,505, while markets 101 - 210 averaged $266,663.

Using Hampton Roads as a sample market, internet usage in the past month broke out as follows:

Sent/received email - 60.5%

Got weather reports/information - 32.7%

Got news - 28.4%

Paid bills - 27.5%

Downloaded music/listened to audio clips - 17.7%

Made travel reservations - 17.1%

Got Financial information/services - 16.6%

Looked up movie listings - 16.5%

Used Internet yellow pages - 16.2%

Used Instant Messageing - 15.9%

Borrell stated that the average interactive sales rep bills $250,000; more sales reps = more revenue.

It was an interesting presentation, providing a good glimpse into the bright future for local interactive sales if the broadcasters will jump on the bandwagon. Thanks to Gordon Borrell for providing the information, and the Virginia Association of Broadcasters for the forum.

Use every social marketing technique out there (and a few not yet out there).

Pay my people well and offer benefits comparable to Google's (including tuition reimbursement).

Reward risk-taking.

Throw away the Policies and Procedures manual.

Have fun at the office (and encourage use of Facebook, Twitter, etc. on company time).

Have non-station branded web products.

Have the best local news, public affairs, and community involvement in town.

Have a radio chip in the iPhone (we can dream, can't we?); Actually, I think that there is a strong homeland security argument for it. How did your cell phone work in the last hurricane? How did the Internet work when MJ died? What if some kook had detonated a nuclear bomb? We need radio on mobile devices.

Get the kids involved in the business again.

Utopian? Yes (but you did ask). We need to start thinking and doing. Soon.

Tuesday, June 23, 2009

It is time for broadcasters to re-think the “norms” under which we have been operating. Our business is being trampled by herds of sacred cows. What we have been doing is no longer working (and not likely to work in the future).

Let’s start with this: “Less is NOT More!” The solution is SIMPLE.

Salespeople. “Cost Accounting 101” teaches that you keep adding salespeople (technically, sales costs) until the marginal revenue (the amount of additional sales coming in) equals the marginal expense (the expense going out). In other words, you do not arbitrarily fire one third of your local sales departments and expect your local sales to increase. Won’t happen. Didn’t happen. Less is NOT More. The old saying about the ideal number of salespeople for your radio station is true: “One more than I have!”

Investment. Less investment in your product(s) does not yield a higher return. “Let’s cut out Research, Sales Training, Live and Local Talent, and Employee Benefits . . . and by the way, let’s run our local news station with no local newspeople.” Lower costs? Yes. Lower revenue? Yes. Less is NOT More.

Marketing and Promotion. When is the last time you saw major ad spend for a radio station on TV? Billboards? We have quit promoting and wonder why we’re losing relevancy. What about good, old-fashioned “on the street” promotions? Do you see many station vans around town? Do you see your own? Or have you caved in to high gas prices? And what about your investment in digital offerings and social marketing products and people? Can we really expect to compete in a digital world if we’re not investing for the future? Less is NOT More.

Pride. Does everyone in your shop feel good about your station(s) and your company? Are you proud of your on-air product and your stream?

Leadership. Are you leading or are you managing? Will your troops storm the beach with you? How much coaching is going on? Or has the HR department’s Policies and Procedures manual become the book of choice? Randy Michaels got this right years ago when rumor has it that his manual simply stated something to the effect of, “Work hard, compete ruthlessly, play hard, and stay legal.”

Enthusiasm. This is a natural offshoot of Leadership. You won’t have one without the other. We’re in the RADIO business. It should be (and once was) a hotbed of creativity and talent. Is it any wonder why the kids don’t want to work for us anymore? The “buzz” is missing. You know it when you spend more of your time making forecasts than sales calls.

Less is NOT More. Should we really be that surprised that revenue has been flat to down for going on nine years? This is not about “How we did it back in the day.” It is about “How will we be relevant five, ten years from now?” Less is NOT More.

But perhaps even more helpful information can be found on the News & Info page (http://www.mediaservicesgroup.com/index.cfm?pg=newsinfo). We have assembled there a cross-section of RSS feeds from industry trade publications and informative blogs. You might find it useful for a quick industry briefing first thing each morning.